Bonds Gain On Awful GDP Data

By Michael Aneiro

Just when it looked like strong economic data was truly taking root, another downbeat economic indicator gives a boost to bonds. The Commerce Department this morning reported that the U.S. economy shrank by 2.9% in the first quarter, an exceptionally bad revision to the previously reported 1.0% contraction and the worst single-quarter contraction in five years. While that could be dismissed as a backward-looking revision to an already-bad first quarter number, it was accompanied by a report showing durable goods orders fell by 1.0% in May, worse than expected.

Treasuries are enjoying all of this enough to break out of their recent range, with the 10-year yield falling below 2.55% for the first time in three weeks to 2.541%, per Tradeweb data. The 30-year bond is up 21/32 in price to trim its yield to 3.372%.